Monday newspaper round-up: Barclays, Deutsche Bank, BAE, PPI provisions

Barclays is locked in negotiations with its African subsidiary about the details of their divorce, which analysts estimate could cost the British bank as much as £1bn. Having announced in March that it planned to sell down its controlling stake in its Johannesburg-listed African operation, Barclays now must agree the terms on which the two will split. - Financial Times

The European Union has given Belgium’s federal government until late on Monday to secure backing for an EU-Canada trade deal from the region of Wallonia or a planned summit to sign the pact will be cancelled. European Council president Donald Tusk, who chairs the collective body of the EU’s 28 national leaders, will speak to Belgian prime minister Charles Michel by late on Monday, an EU source told Reuters, so that Canadian prime minister Justin Trudeau can decide whether to fly to Brussels for the signing on Thursday. - Guardian

Big banks are expected to take another £2 billion hit on payment protection insurance this week because of the longer time allowed for new claims. Lenders will make the provisions with quarterly results that will be scrutinised for the impact of Brexit on the economy, while the weakening pound and heightened market activity will also have an affect on results. - The Times

A verdict by a California judge last week may have opened up a new multibillion-dollar litigation risk for Deutsche Bank, the German bank still in the grip of settlement talks over mortgage-backed securities with the US Department of Justice. The risk relates to claims from a group of institutional investors that Deutsche should have done a better job as the administrator of trusts that held residential mortgage-backed securities in the years after the crisis. Lawyers for the investors — led by BlackRock — claim that as those assets plummeted in value, Deutsche had a duty to return them to the originators, and order them to replace them with better loans. - Financial Times

BAE Systems is today identified as the employer that will struggle the most to honour pension promises in an analysis of retirement provision by British companies. The defence group heads two out of four measures of potential strain in an assessment by Hymans Robertson, consulting actuaries. - The Times

A majority of the British public will back extra government spending on road, rail and housing to improve the country’s infrastructure, according to an exclusive poll for the Guardian that indicates strong support for Philip Hammond to boost public investment in next month’s autumn statement. Almost two-thirds of Britons agree the country is not doing enough to meet its infrastructure needs and 76% believe investment in infrastructure is vital to future economic growth.

An unlikely resurgence in the price of coal could deliver an $18 billion boost to the four big mining groups listed in London. Despite falling foul of increasingly stringent environmental regulations around the world, the unfashionable fuel has rebounded spectacularly this year, making it one of the best-performing commodities. - The Times

Investors from the world’s three largest economies are increasingly sceptical about doing deals in the UK due to uncertainty over Brexit, according to a report from one of the world’s top accounting firms. The UK dropped out of the top five global destinations for mergers and acquisitions for the first time in the seven-year history of the EY Global Capital Confidence Barometer survey. - Guardian

Companies across the EU would suffer more than double the hit from trade tariffs than their UK counterparts if Britain leaves Europe without a free trade deal, research from the right-of-centre thinktank Civitas says. It would cost EU businesses in the 27 remaining member states a total of some £12.9bn every year to export their goods into the UK if a deal is not reached with Europe and trade is conducted under World Trade Organisation rules, Civitas found. - Telegraph

Rolls-Royce has taken a step forward in developing more powerful and efficient jet engines for commercial passenger aircraft with successful tests of a vital component for its UltraFan design. The company has started tests of a “powered gearbox” linking the turbine at the back of the engine with the giant fan at the front. - Telegraph

Microsoft is to increase its prices by as much as 22pc in the UK because of sterling’s recent decline, a rise that is likely to affect thousands of businesses and could cost the Governments tens of millions of pounds. The software giant is the latest big-name company to force through a post-referendum price rise, saying the move would “harmonise” its prices across Europe. - Telegraph

New European cars with petrol engines will be allowed to overshoot a limit on toxic particulates emissions by 50% under a draft EU regulation backed by the UK and most other EU states. Campaigners say that a simple €25 (£22) filter could drastically cut the pollution, but it is understood that car-makers have instead mounted a successful push for loopholes and legislative delay. - Guardian

The new owners of BHS have unveiled plans to expand the department store overseas, six months after its UK operations collapsed into administration. Al Mana Group, a Qatari retail congolmerate which bought BHS’s online and international operations from administrators in June, is in the final stages of agreeing contracts with three new franchise partners in Africa, the Middle East and Europe. - Telegraph